Defence dimension of the “Midas” case – what’s new?
On 29 April 2026, one of Ukraine’s leading media outlets, Ukrainska Pravda, published transcripts of recordings of conversations between businessman Timur Mindich and senior government officials. The materials are part of evidence documented by the National Anti-Corruption Bureau of Ukraine (NABU) within the so-called “Midas” case. They reportedly include conversations between individuals allegedly involved in efforts to acquire state funding and lobby the sale of a stake in Fire Point LLC – a private missile and drone manufacturer – to foreign investors. The outlet obtained the materials from its own sources. Although neither NABU nor the Specialised Anti-Corruption Prosecutor’s Office (SAPO) has formally confirmed them, parts of these materials have already been referenced in earlier court hearings.
Previously, both NAKO and the Public Anti-Corruption Council of the Ministry of Defence (with NAKO providing communication and organisational support to the Council) had already drawn public attention to the case involving Chinese-made body armour supplied by Milikon LLC and alleged lobbying for this supplier by then-Minister of Defence Rustem Umerov. As a result, the body armour was rejected and the contract terminated.
According to the materials published by Ukrainska Pravda, Timur Mindich allegedly discussed with Rustem Umerov (at the time of the conversation — 30 June 2025 — Minister of Defence of Ukraine) an increase in state contracts awarded to Fire Point and the sale of a company stake to investors from the United Arab Emirates.
The recordings may suggest that Timur Mindich is a de facto beneficiary of the company. Given that he is under sanctions imposed by Ukraine, legal confirmation of his link to Fire Point would result in the company losing the ability to supply products to the defence and security forces.
The Public Anti-Corruption Council was among the first oversight bodies to comment on the recordings. The Council assessed the actions of the individuals involved as potentially indicating abuse of power and disclosure of state secrets in the case of Rustem Umerov, and possible abuse of influence and inducement to misuse public funds in the case of Timur Mindich.
The Council calls for Rustem Umerov to be suspended from his position as Secretary of the National Security and Defence Council until the completion of investigative actions and court proceedings; for the initiation of a selective (partial) nationalisation of Fire Point to ensure uninterrupted supply to the frontline without enriching individuals allegedly involved in corrupt practices; and for the establishment of a working group involving the General Staff of the AFU, representatives of the armed services, and investigative bodies to conduct a comprehensive audit of contracts and pricing policy of Fire Point.
The Council’s statement triggered significant public resonance in Ukraine and was widely covered by leading media outlets. At the same time, an organized information campaign emerged defending Fire Point and calling on Ukraine’s anti-corruption community not to discuss the case, arguing that public scrutiny harms the defense industry. On the other hand, the Anti-Corruption Council at the Ministry of Defence insists that accountability and a strong reputation are exactly what help defence companies attract investment and build credible international partnerships.
Since its establishment, Fire Point has been one of the most opaque companies in Ukraine’s defence industry. Little to no public information has been available on its operations, costs, profits, or beneficial owners. Reported production figures have varied significantly (by late 2025, the company planned to reach a production rate of seven “Flamingo” missiles per day, but only three were achieved). Experts have also raised questions about strike statistics of Fire Point’s flagship systems: over the entire period of operation, open sources recorded 23 missile launches, of which six reached Russian territory and two hit their targets. At the same time, according to the General Staff of the Armed Forces of Ukraine, Fire Point UAVs demonstrate the highest rate of mission completion and target engagement among comparable systems.
Against this backdrop, NAKO supports the Council’s statement and calls for the rapid establishment of a working group within the Ministry of Defence to assess the volume of Fire Point’s deliveries to the Armed Forces of Ukraine, the effectiveness of its products, and the beneficial ownership structure of a company that has attracted such sustained state support. We recognise how critical it is for the state to maintain a balance between transparency and security in wartime conditions, and how sensitive the disclosure of information about defence manufacturers can be. However, when it may involve the potential misuse of billions of hryvnias in public funds, at least partial and controlled disclosure of information is, in our view, fully justified and necessary.
Drone Deal and Arms Exports: When Will Ukraine Open Up Sales?
In April, President Volodymyr Zelenskyy announced the Drone Deal mechanism — a set of special agreements that would allow Ukraine to export domestically produced weapons while ensuring that the needs of the frontline remain the top priority.
In practical terms, the President is proposing to finally open up exports of Ukrainian weapons — a step that domestic manufacturers have been calling for for more than a year. Companies argue they cannot scale production in conditions where capacity already exists but remains underutilised due to insufficient state procurement funding.
Last month, during the Defence Tech Export Forum, Head of the Presidential Office Kyrylo Budanov stated that opening exports during wartime is not possible. At the same time, he acknowledged that Ukraine could export weapons that are no longer actively used in the current war but remain in demand in regions such as Asia or Africa — for example, certain long-range UAVs or early-generation FPV drones.
As a potential solution, President Zelenskyy proposed the international Drone Deal framework.
Drone Deal mechanism: how it would work
Drone Deal is envisioned as a multi-year cooperation programme between Ukraine and partner countries, within which Ukraine would provide expertise and assistance in protecting critical civilian infrastructure from large-scale attacks.
According to Volodymyr Zelenskyy, the Drone Deal framework would include at least ten separate export contracts for Ukrainian weapons. It would also involve co-production — building manufacturing lines both in Ukraine and abroad — as well as joint development of new technologies, long-term financing commitments, and clearly defined cooperation timelines.
The President has indicated that Saudi Arabia, the United Arab Emirates, and Qatar have shown interest in such agreements.
He also plans to propose similar arrangements to Finland, Germany, Norway, Italy, Sweden, and the Netherlands.
The Ministry of Foreign Affairs, together with the Main Intelligence Directorate (HUR) and the Security Service of Ukraine (SBU), are expected to develop three country lists:
- “Green list” — strategic partners, where exports are a priority
- “Yellow list” — countries requiring additional military-technical assessment before export approvals
- “Red list” — states cooperating with the aggressor, with which exports are strictly prohibited
What will Ukraine export?
According to Head of the Presidential Office Kyrylo Budanov, Ukraine will focus on “targeted solutions”:
- Naval drones — a unique product repeatedly tested in combat conditions
- Surplus production — technologies that are no longer critically effective for current battlefield conditions but remain in demand in markets such as Asia and Africa (for example, early-generation FPV drones)
First international cases
The first Drone Deal agreement was initially proposed to the United States, but it was not signed. However, during April 2026, Ukraine already launched the first strategic agreements of this type.
On 14 April in Oslo, a joint declaration was signed with Norway on deepening cooperation in security and defence. Following an interview with NRK, Norwegian Defence Minister Tore Sandvik confirmed the production of drones under a licence from a Ukrainian company.
On 15 April, a political agreement was reached on a joint drone production project with Italy. The initiative foresees combining Ukrainian technologies with Italian industrial capacity. Italy’s Ministry of Defence and the state-owned company Leonardo will be involved on the Italian side.
On 16 April, a Joint Statement was signed with the Netherlands on launching work on a Drone Deal framework, covering joint production of drones, missiles, electronic warfare systems, and other defence technologies. It will also include research, innovation, and systematic exchange of operational experience gained by Ukraine during its defence against Russian aggression.
Control and economic framework
To ensure transparency, the Ministry of Defence has proposed establishing a Defence Industry Products Register, which would enable real-time assessment of export potential. In addition, a differentiated special export duty is being considered:
- lower rates for mass-produced weapons
- higher rates for high-tech developments
The long-running debate on opening arms exports — ongoing for more than two years — is expected to shift from political declarations such as “Built with Ukraine” and “Drone Deal” towards the creation of real mechanisms. The critical growth point for Ukraine’s defence industry is no longer only the permission to export, but the establishment of a transparent and predictable public policy framework. Only clear and stable rules will allow Ukrainian manufacturers to scale, attract investment, and strengthen the technological advantage of the Defence Forces through export-driven resources.
Transition to State-Guaranteed Quality Under New Standards
As of 1 January 2026, Ukraine has introduced a new system for quality control of defence products. To analyse the substance of these changes, NAKO organised a Defence Talks discussion, bringing together representatives of the Ministry of Defence, the Defence Procurement Agency, and the Public Anti-Corruption Council of the Ministry of Defence.
The discussion focused on the complete elimination of Soviet-era approaches to quality control in defence production and the transition to NATO standards. This shift has long been overdue, particularly since the start of the full-scale invasion, when Ukraine’s defence industry has grown fiftyfold.
A shift in paradigm: who is responsible for what?
The reform is based on a fundamental redefinition of roles:
- The manufacturer is responsible for the product. Companies now issue certificates of conformity themselves and bear full legal responsibility for the quality of delivered goods.
- The Ministry of Defence, through its structural unit — the Main Directorate for State Quality Assurance — verifies the capability of the manufacturer’s quality management system to meet defence customer requirements. This means that inspections also cover production processes and complaints-handling systems, since a properly functioning system significantly reduces the likelihood of defective output.
Military acceptance system and past corruption risks
The former military acceptance system, which remained largely unchanged since the 1990s, effectively became a cover for corruption, as it focused only on inspecting final outputs. This created a system of “collective irresponsibility”.
Ukraine has already seen the consequences of this model in a number of high-profile criminal cases: “dummy mortars” worth UAH 2.9 billion, defective mortar shells supplied to the front, and substandard ballistic goggles.
In all these cases, inspectors from the former military acceptance system signed off on fictitious documents confirming the quality of defence products. Today, the system has been significantly streamlined: whereas in the 1990s it included around 12,000 personnel (1.2% of the Armed Forces), these functions are now performed by specialists accounting for only 0.12% of the Defence Forces.
Three stages of quality control: how the system works today
The new state quality assurance model includes the following control stages:
- Pre-contract assessment of quality management systems of procurement participants. Inspectors analyse whether a company is capable of responding to issues in a timely manner and correcting violations.
- Continuous monitoring during contract execution by the Ministry of Defence. This includes assessing system performance, identifying non-conformities, monitoring quality plan implementation, and analysing complaint-handling processes.
- Production inspections, carried out when there is a risk of deterioration in the quality of goods, works, or services.
The quality control system in defence procurement is undergoing a fundamental transformation — but rapid results should not be expected. Building a fully effective model cannot be achieved within a few months; significant work still lies ahead.
First and foremost, legislative support is needed: procurement agencies such as the State Logistics Operator (DOT) and the Defence Procurement Agency (AOZ) must be given effective tools to exclude non-compliant suppliers, as such actors often obstruct processes through court challenges.
Equally important is the revision of outdated standards and approaches — for example, the current valuation of military food rations at approximately EUR 3 per day is no longer acceptable.
At the same time, personnel reform is required: quality control must be carried out by trained professionals, not individuals appointed through informal connections.
Finally, the defence industry itself must recognise that state defence contracts are not only a source of profit, but also a responsibility for the lives of service members.
Why is Ukraine’s military short of ground robots?
In April 2026, a cognitive dissonance emerged within Ukraine’s defence sector: while the Ministry of Defence reports record-high procurement volumes of ground robotic systems (GRS), civil society representatives argue that there is still a critical shortage of these systems on the frontline. The delay in deliveries is linked to changes in tax legislation that came into force at the beginning of the year.
The role and importance of GRS
Ground robotic systems have become a critical tool for preserving human lives, as they can perform logistics, mine-laying, and casualty evacuation tasks in high-risk areas. In March 2026 alone, Ukrainian forces conducted more than 9,000 missions using such systems.
The state set an ambitious target for the first half of 2026 — to contract 25,000 GRS units, which is twice the volume of the entire 2025 procurement. However, implementation of these plans has come under threat.
The core issue: VAT and classification
Since January 2026, Ukraine has changed the taxation rules for electric vehicles, removing the VAT exemption previously applied to them. This same exemption had also applied to ground robotic systems. As a result, GRS have effectively become 20% more expensive, as they were not included in the list of exceptions alongside aerial and maritime drones.
Key consequences of the tax changes:
- Most contracts were signed without accounting for VAT. After the legislative change, manufacturers found themselves in a situation where contract values no longer cover production costs.
- Producers are requesting a revision of procurement prices, but budgetary procedures do not allow for rapid adjustments to already signed agreements.
Public and expert reaction
Military correspondent Yuliia Kirienko-Merinova notes that, due to a lack of new deliveries, soldiers on the frontline are forced to rebuild ground robotic systems from damaged equipment in order to meet urgent operational needs.
Tetiana Nikolaienko, Deputy Head of the Public Anti-Corruption Council of the Ministry of Defence and Senior Researcher at NAKO, stated that the Ukrainian Arms Council has already submitted an appeal to the relevant parliamentary committee and is coordinating with the Public Anti-Corruption Council of the Ministry of Defence on the issue.
According to her, it is now essential to urgently amend the Tax Code to align the legal status of ground drones with that of unmanned aerial vehicles.
Defence Procurement of Food for the Armed Forces “Recaptured” by Actors in Criminal Cases
One of the largest suppliers of food for the Armed Forces of Ukraine has become a company linked to the scandalously known Tetiana Hlyniana (she and her associates have been formally notified of suspicion in a case involving the embezzlement of UAH 733 million). Despite three separate criminal proceedings initiated by NABU, the State Bureau of Investigation (SBI), and the Economic Security Bureau of Ukraine (ESBU), companies associated with Hlyniana continue to win multi-billion-hryvnia tenders from the Defence Procurement Agency for food supply to the Armed Forces.
According to data from the Prozorro public procurement system, during the first three months of 2026, Grand Consult LLC won 36 lots. In terms of contract value, the company ranked second among all suppliers, securing agreements worth UAH 1.77 billion. Only Ukrnafta received more (UAH 3.02 billion).
Tetiana Nikolaienko, Senior Researcher at NAKO and Deputy Head of the Public Anti-Corruption Council of the Ministry of Defence, directly points to the beneficiaries of this success. According to her, Grand Consult is ultimately linked to Tetiana Hlyniana, known as a key figure in the “eggs at 17 hryvnias” scandal. The company is also reported to supply nearly half of the ready-to-eat rations for the frontline.
Strange “mistakes” in tenders
The largest contract of the year — worth UAH 1 billion for food supply to military units in the Chernihiv region — was awarded to Hlyniana’s company on 18 March 2026. The tender process was accompanied by questionable circumstances:
- Grand Consult LLC offered a price UAH 10 million higher than its competitor, the Busk Cannery.
- The bid from the Busk Cannery was rejected due to unusual technical errors in documentation, raising concerns about a potentially coordinated outcome designed to transfer the contract to another bidder.
It is also noteworthy that the Busk Cannery itself is under scrutiny by law enforcement agencies, as since February 2025 it has been mentioned in a case involving alleged illicit enrichment of Kyrylo Svyrydov, head of the food supply service of a military unit in the Dnipro region.
Why “blacklists” do not work
One of the key systemic problems in defence procurement is that reputational concerns are not a legal basis for disqualification of bidders. Public scandals or even formal suspicion notices do not allow a state customer to terminate contracts.
Tetiana Nikolaienko explains that when the Ministry of Defence attempted to introduce an internal “blacklist” of unreliable suppliers, it triggered a wave of lawsuits. Companies quickly realised that current legislation does not provide for such restrictions. The initiative was sincere but not legally grounded. For such a mechanism to work, blacklists must be formalised either at the level of the Verkhovna Rada or through a Cabinet of Ministers resolution.
Draft Anti-Corruption Strategy for 2026–2030 Officially Submitted to the Government for Consideration
In April 2026, the National Agency on Corruption Prevention (NACP) completed a nearly two-year process of drafting a document that will define Ukraine’s anti-corruption policy for the next five years. The Strategy is focused on addressing the most vulnerable sectors, including the defence sector.
The new Anti-Corruption Strategy is not merely a declarative document with high-level objectives, but the result of in-depth expert analysis of 16 high-risk sectors, public consultations, coordination with relevant authorities, and legal review findings.
NAKO was one of the co-authors of the analytical materials that formed the basis of the defence-related section of the Strategy. The draft is available on the official NACP platform.
Seven key defence-sector challenges: what needs to change?
The final text of the Strategy clearly identifies seven “growth points” in Ukraine’s defence sector, grouped into three strategic areas:
1. Governance
- Weakness of democratic civilian oversight over the Defence Forces
- Excessive secrecy in the defence sector
- Regulatory gaps in access to exports of military goods
2. Defence resource management
- Lack of full implementation of the strategic cycle “planning–programming–budgeting–execution”
- Deficiencies in procurement policy
3. Human capital policy
- Reform of military personnel management
- Non-transparent rules for reserving personnel from mobilisation
- Why the speed of adoption matters
The timely adoption of the Anti-Corruption Strategy and the corresponding State Anti-Corruption Programme is critical for Ukraine. This is not only part of fulfilling international obligations and requirements of key monitoring mechanisms (including the OECD and GRECO), but also one of the core conditions for progress on the path toward EU membership.
The previous Anti-Corruption Strategy for 2021–2025 was, due to political debates, adopted only in 2022, and its implementation programme only in 2023. This effectively reduced the timeframe for reform implementation by half — a practice that is considered unacceptable in public governance.
For this reason, civil society calls for the swift adoption of the document both by the Government and the Parliament.
Thank you to the New Democracy Fund for supporting the creation of this review.
First photo: AP Photo / Efrem Lukatsky